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More Than Half of All Seniors Not Required to File Federal Tax Return

While it is true that everyone has to pay taxes, there are exceptions, especially for people age 65 and older. If your gross income was below the Internal Revenue Service tax threshold last year, you don't have to file a return this year.

More people fall into this category than you might think. According to the Tax Policy Center, more than half of the 65-plus age group isn't required to file.

 

Naturally, you should check carefully to make sure you're exempt before not filing a return, as the income threshold is subject to change from one year to the next. Also, your filing status, and other variables, can make a difference.

 

The income threshold is based on "gross income," meaning all the income you received during the year, unless it is specifically exempt from tax. You don't have to file a tax return this year if:

 

• You are single and your 2009 gross income was less than $9,350 ($10,750 if you're 65 or older). 
• You are married filing jointly and your gross income was under $18,700. If you or your spouse is 65 or older, the limit increases to $19,800. And if you're both over 65, your income must be under $20,900 to not file. 
• You are head of household and your gross income was below $12,000 ($13,400 if age 65 or older). 
• You are married filing separately and your income was less than $3,650. 
• You are a qualifying widow or widower with a dependent child and your gross income was less than $15,500 ($16,150 if age 65 or older).

Of course, there could be a very good reason to file a return, even if you aren't required to. If you had tax withheld from your income, you most likely are entitled to all of it back in a refund. However, you won't get a refund unless you file a return.

 

And keep in mind that your state may require you to file a return, even if the IRS doesn't. So don't discard your tax records.

 

Elderly Tax Credit

 

Depending on your income level, you may be eligible for a federal tax credit for the elderly, which can add up to as much as $750 for a single taxpayer and up to $1,125 for a couple.

 

To qualify, you must be 65 or older and a US citizen. For a single filer, your adjusted gross income must be less than $17,500 and the nontaxable part of your Social Security or other nontaxable pensions, annuities or disability income must be less than $5,000.

 

If you are under age 65 at the end of 2009, you can qualify for the credit only if you are retired on permanent and total disability and have taxable disability, according to the IRS.

 

If you are married and are filing jointly, and both spouses qualify, your income will need to be less than $25,000, and your nontaxable Social Security or other nontaxable pensions must be under $7,500.

 

If your income falls below the filing threshold but you had taxes withheld last year, you may be able to stop the withholding. According to the IRS, If you have taxes withheld for wage or pension Income and have less than $300 of unearned income (e.g. interest, dividends, unemployment compensation), you can stop your withholding by filling out a new Form W-4, Withholding Certificate or a Form W-4P, Withholding Certificate for Pension or Annuity Payments. You may obtain the form you need from a tax preparer, or they can be downloaded from the IRS Website.

 

If you have any question at all whether you fall into the category of non-filers, consult a family member or tax professional.

 

(Article courtesy of ConsumerAffairs.com)

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A Caregivers Guide to Taxes -- 3/30/05

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